EXHIBIT 10.10
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TERMINATION AND SETTLEMENT AGREEMENT
This TERMINATION AND SETTLEMENT AGREEMENT (hereinafter referred to as the
"Settlement Agreement") is entered into on May 22, 2002 (hereinafter the
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"Effective Date"), by and between Compass Knowledge Holdings, Inc. (hereinafter
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referred to as "Compass") and Xxxxxxx Xxxxx (hereinafter referred to as
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"Xxxxx").
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WITNESSETH:
WHEREAS, Compass and Xxxxx entered into an Employment Agreement on or about
May 1, 2000, which was subsequently amended effective January 7, 2002 whereby
Xxxxx served as Chief Financial Officer and Treasurer of Compass (hereinafter
the Employment Agreement, as amended, shall be referred to as the "Employment
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Agreement"). A copy of the Employment Agreement is attached hereto as Exhibit
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"A" and by this reference incorporated herein and made a material part hereof;
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and
WHEREAS, the parties have agreed that it is in their mutual best interests
to terminate Ruben's employment with Compass and desire to memorialize the terms
of their agreement by entering into this Termination and Settlement Agreement.
NOW, THEREFORE, in consideration of the promises and undertakings contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is acknowledged, Compass and Xxxxx agree as follows:
1. Recitals. The foregoing recitals are true and correct in all material
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respects and by this reference incorporated herein and made a material part
hereof.
2. Termination of Employment. The parties hereby agree that effective as of
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the close of business on May 24, 2002, the Employment Agreement and Ruben's
employment with Compass is effectively terminated (the "Termination Date")
and neither party shall thereafter have any rights, duties, obligations,
and/or claims with respect to each other except as otherwise specifically
provided herein.
3. Certain Covenants and Undertakings. Notwithstanding the foregoing
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termination, the parties hereby agree as follows:
(i) Notwithstanding the Termination Date, Xxxxx agrees to be
physically present at the offices of Compass for two (2) full
mutually agreeable work days, presently scheduled for June 3/rd/
and 4/th/, 2002, to provide information, data, direction, help
and other reasonable and customary services to facilitate the
transition of his work load to Compass and its designees and to
provide the Transition Services defined in Section 3 below.
(ii) Compass agrees to pay Xxxxx his base salary (inclusive of car
allowance) in accordance with the Employment Agreement through
the Termination Date in the amount of $3,370.
(iii) Benefits provide by Compass which Xxxxx is entitled to under his
Employment Agreement or otherwise will terminate on the
Termination Date, saving his health insurance coverage which
will expire on May 31, 2002. Notwithstanding
the foregoing, Compass agrees to pay, on behalf of Xxxxx, the
cost of COBRA insurance coverage for the months of June and
July 2002 in an amount not to exceed $750.00 per month.
(iv) Compass agrees to allow Xxxxx reasonable use of his Compass
provided cell phone through July 31, 2002.
(v) Compass agrees to pay Xxxxx the sum of $15,000.00 in
consideration for the two (2) days of on-site work provided in
Section 3(i) above and the Transition Services set forth in
Section 3 below.
(vi) Compass agrees to reimburse Xxxxx for all proper and mutually
agreeable expenses he has incurred on behalf of Compass through
the Termination Date.
(vii) Compass agrees to pay Xxxxx accrued vacation pay in the amount
of $2,965.60.
(viii) Pursuant to that certain Stock Option Agreement dated April 10,
2001 (a copy of which is attached hereto as Composite Exhibit
"B"), Xxxxx was granted options to purchase 150,000 common
shares (the "First Option Shares") of Compass at an exercise
price of $0.375 per share. Pursuant to that certain Stock
Option Agreement dated July 6, 2001 (a copy of which is
attached hereto as Composite Exhibit "B"), Xxxxx was granted
options to purchase 150,000 common shares (the "Second Option
Shares") of Compass at an exercise price of $0.45 per share.
With respect to these Option Shares, the parties hereby agree
as follows:
1. 50,000 of the 150,000 First Option Shares shall be deemed
vested as of the Termination Date and the remaining 100,000
First Option Shares shall be forfeited as of the
Termination Date;
2. The Stock Option Agreement dated April 10, 2001 (the "First
Option Agreement"), which controls the 50,000 vested First
Option Shares shall remain in effect with respect to the
50,000 vested First Option Shares, except as otherwise
provided herein;
3. The 150,000 Second Option Shares shall be forfeited and
Stock Option Agreement dated July 6, 2001 (the "Second
Option Agreement") shall be null and void as of the
Termination Date;
4. Notwithstanding anything to the contrary in the First
Option Agreement, the option to purchase the 50,000 vested
First Option Shares shall terminate if (i) such First
Options Shares are not exercised on or before midnight on
April 30, 2003, or (ii) Xxxxx breaches this Settlement
Agreement; and
5. Xxxxx and any future holders of the common shares
underlying the said Options agree that for so long as they
hold such shares that sales of such shares in the public
marketplace will be restricted to an amount of shares that
will not exceed during any given week 10% of the average
trading volume of the Compass shares for the four (4) week
period immediately preceding the week in which such shares
are sold. For
example, if the average trading volume for a given four (4)
week period is 10,000 shares, Xxxxx and the holders will be
restricted to a sale of not more than 1,000 Compass common
shares.
(viii) Xxxxx shall not be entitled to any additional compensation,
bonuses, options, benefits, Liquidation Event Payments (as
defined in the Employment Agreement), reimbursements and/or any
other payments of any kind whatsoever except as otherwise
specifically provided pursuant to this Settlement Agreement.
(ix) Except as provided in this Settlement Agreement, the Employment
Agreement is hereby terminated and is of no further force or
effect as of the Termination Date. Notwithstanding the
foregoing, the parties hereby agree that the covenants
contained in Articles VI and VIII of the Employment Agreement
shall survive the termination of the Employment Agreement and
the execution and closing of this Settlement Agreement for a
period of two (2) years from the Termination Date.
4. Payment Schedule. With respect to the foregoing sums due Xxxxx in the
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aggregate amount of $21,335.60 plus the above indicated benefits (the
"Settlement Amount"), Compass agrees to pay Xxxxx such Settlement Amount as
follows:
(i) No later than May 31, 2002, Compass will pay Xxxxx his accrued
salary and accrued vacation pay in the amount of $6,335.60;
(ii) No later than June 30, 2002, Compass will pay Xxxxx the sum of
$5,000;
(iii) No later than July 31, 2002, Compass will pay Xxxxx the sum of
$5,000,
(iv) No later than August 30, 2002, Compass will pay Xxxxx the
remaining balance of $5,000; and
(v) All monies owed pursuant to Sections 3(iii) and 3(vi) will be
paid when due.
5. Transition Services. As a condition to receiving the payments set forth in
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Section 3(iv) and the Options provided for in Section 3(vii) pursuant to
the payments schedule set forth in Section 4(ii)-(iv) above, beginning June
3, 2002 and ending on August 30, 2002, Xxxxx agrees to provide
telephonically to Compass and its subsidiaries such transition services as
are reasonably requested by Compass, but in no event shall such transition
services exceed an average of 15 hours per month without additional
mutually agreed upon compensation (the "Transition Services"). In
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performance of the Transition Services, Xxxxx shall provide Compass with
the benefit of his best judgment and efforts and will, in good faith and in
a timely manner, cooperate with all designated Compass personnel and
agents. It is contemplated at the time of the execution of this Agreement
that Xxxxx will provide Compass and its subsidiaries with the following
Transition Services:
(a) Information, files, folders, documents, data, assumptions, formulas
and assistance with respect to the Compass weekly cash flow statement;
(b) Information, files, folders, documents, data, assumptions, formulas
and assistance with respect to all Compass and subsidiary contracts
for which he
negotiated, executed, has information regarding or was otherwise
involved including, without limitation, all hotel contracts;
(c) Information, files, folders, documents, data, assumptions, formulas
and assistance with respect to all Compass and subsidiary budgets;
(d) Information, files, folders, documents, data, formulas and assistance
with respect to all Compass and subsidiary vendor agreements and
payment schedules;
(e) Information, files, folders, documents, data, formulas and assistance
with respect to all Compass call center and marketing matters; and
(f) Information, files, folders, documents, data, assumptions, formulas
and assistance with respect to all Compass and subsidiary financial or
other matters including without limitation, financial statements,
footnotes, management's discussion and analysis, equity matters,
earnings per share calculations, etc. for which he has information or
was otherwise involved.
Compass agrees to reimburse Xxxxx for ordinary, necessary and reasonable
out of pocket expenses he incurs in performing the Transition Services,
subject to Compass' prior written approval and Ruben's full and appropriate
documentation, including, without limitation, receipts for all such
expenses in the manner required pursuant to Compass' policies and
procedures and the Internal Revenue Code of 1986, as amended (the "Code")
and applicable regulations as are in effect from time to time.
6. Releases. (a) Xxxxx, on behalf of himself and his successors, heirs,
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executors, administrators, representatives, affiliates, agents and assigns,
fully and unconditionally forever releases and discharges Compass, its
parent company and their officers, directors, successors, assigns,
affiliates, and subsidiaries (hereinafter the "Compass Releasees") from any
and all claims, demands, manners of action, causes of action, damages,
judgments, agreements, demands, debts or liabilities whatsoever whether
known or unknown, suspected or unsuspected, both at law and in equity,
which Xxxxx now has, has ever had or will hereafter acquire against the
Compass Releasees with respect to activities arising from, out of or
otherwise in connection with Ruben's employment with Compass or arising
from, out of or otherwise in connection with any other matter, cause or
event including, but not limited to, any compensation, wages, salary,
bonuses, vacation pay, sick pay, disability pay, unemployment claims or
benefits, expense reimbursements, severance or termination awards and
claims, insurance benefits, and any other benefits; provided, however, that
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nothing contained herein shall operate to release Compass from its
obligations as set forth in this Settlement Agreement.
In furtherance of the foregoing, Xxxxx hereby irrevocably covenants to
refrain from, directly or indirectly, asserting any claim or demand, or
commencing, instituting or causing to be commenced, any proceeding of any kind
against any Compass Releasee, based upon any matter purported to be released
hereby.
(b) Compass on behalf of itself and its subsidiaries, successors,
affiliates, and assigns, fully and unconditionally forever releases and
discharges Xxxxx and his heirs, executors, administrators, and
representatives (hereinafter "Xxxxx Releasees") from any and all claims,
demands, manners of action, causes of action, damages, judgments,
agreements, demands, debts or liabilities whatsoever whether known or
unknown,
suspected or unsuspected, both at law and in equity, which Compass now has
or has ever had against the Xxxxx Releasees with respect to activities
arising from, out of or otherwise in connection with Ruben's employment
with Compass except as otherwise provided herein and provided, that nothing
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contained herein shall operate to release Xxxxx from his obligations
pursuant to this Settlement Agreement or any intentional wrongful or
grossly negligent act.
7. Indemnification. Xxxxx hereby agrees to indemnify and hold harmless
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Compass, its subsidiaries and their directors, officers, agents, employees,
affiliates, counsel and each other person or entity who controls Compass
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties") from and against any and all losses, claims, damages
or liabilities (or actions in respect thereof), joint or several, to which
they or any of them may become subject under the 1933 Act or any other
statute or at common law and to reimburse such Indemnified Parties for any
legal or other expense (including the cost of any investigation and
preparation) incurred by them in connection with any litigation, whether or
not resulting in any liability, but only insofar as such losses, claims,
liabilities and litigation arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact made by Xxxxx to
others or provided by Xxxxx to others in any document or necessary to make
the statements made not misleading, or an omission to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading (including, but not
limited to, any documents deemed to be incorporated into any disclosure
documents by reference), (ii) any breach by Xxxxx of this Settlement
Agreement or any covenant contained herein, or (iii) otherwise relating to,
arising out of or in connection with the Ruben's Transition Services to be
provided by Xxxxx to Compass pursuant to this Settlement Agreement
including, without limitation, the willful misconduct, fraud or gross
negligence of Xxxxx.
8. Captions; References. The headings and captions in this Agreement are for
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convenience of reference only and shall not define, affect or limit any of
the terms or provisions hereof or therein. All references herein to
Paragraphs, Articles and/or Sections are, unless specified otherwise,
references to paragraphs, articles and/or sections of this Agreement.
Unless specifically indicated otherwise, all references herein to an
"Exhibit," "Annex" or "Schedule" are references to exhibits, annexes or
schedules attached hereto, all of which are incorporated herein and made a
part hereof for all purposes, the same as if set forth fully herein, it
being understood that if any exhibit, annex or schedule attached hereto
which is to be executed and delivered contains blanks, the same shall be
completed correctly and in accordance with this Settlement Agreement prior
to or at the time of the execution and delivery thereof. The words
"herein," "hereof," "hereunder" and other similar compounds of the word
"here" when used in this Settlement Agreement shall refer to the entire
Agreement and not to any particular provision or section unless
specifically indicated otherwise.
9. Binding Effect. This Agreement shall be binding upon the parties and their
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respective administrators, successors and assigns, and shall inure to the
benefit of the parties and their respective administrators, successors and
assigns.
10. Severability. Should any of the provisions of this Agreement be determined
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to be invalid by a Court of competent jurisdiction, the parties agree that
this shall not affect the validity or enforceability of the remaining
provisions, and that they shall renegotiate and reform any invalid
provisions in good faith to effectuate the purpose of this Agreement and to
conform it to the law.
11. Entire Agreement and Modification. This Agreement constitutes the entire
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understanding between the parties and may not be modified without the
express written consent of the parties.
12. No Improper Inducement. The parties represent and acknowledge that in
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executing this Agreement they do not rely, and have not relied, on any
representation or statement made by any of the parties or their respective
agents, representatives or counsel with regard to the subject matter, bases
or effect of this Agreement or otherwise, other than as specifically stated
in this Agreement.
13. Knowing and Voluntary. The parties hereto have read this Agreement and
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fully understand it. The only promises made in connection with this
Agreement are those stated herein and the parties have signed this
Agreement knowingly and voluntarily.
14. Counterparts. This Agreement may be executed in one or more counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15. Dispute Resolution.
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(a) General. In the event of any dispute, difference or question arising
between the parties in connection with this Agreement, the construction
thereof, or the rights, duties or liabilities of either party, and which
dispute cannot be amicably resolved by the good faith efforts of the
parties, then such dispute shall be referred to binding arbitration as set
forth in Article 15(b) below.
(b) Arbitration. Binding arbitration shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association in
Orlando, Florida. The arbitration panel shall be composed of three
arbitrators, one of whom shall be chosen by Compass, one by Xxxxx and the
third by the two so chosen. The arbitrators shall each reasonable
experience in dealing with such matters and shall not be an employee,
director, shareholder or agent of either party or of an affiliate of either
party, or otherwise involved (whether by contract or otherwise) in the
affairs of either party. If both or either of Compass or Xxxxx fails to
choose an arbitrator or arbitrators within fourteen (14) days after
receiving notice of commencement of arbitration or if the two arbitrators
fail to choose a third arbitrator within fourteen (14) days after their
appointment, the then President or his designee of the Orlando office of
the American Arbitration Association shall, upon the request of both or
either of the parties to the arbitration, appoint the arbitrator or
arbitrators required to complete the board or, if he shall decline or fail
to do so, such arbitrator or arbitrators shall be appointed by the
President or his designee of the American Arbitration Association. The
arbitrators shall make their decision known to both parties as quickly as
possible by delivering written notice of their decision to both Parties.
The Parties shall agree in writing to comply with the ruling of the
arbitration panel within five (5) days of receipt of notice of such ruling.
The decision of the arbitrators shall be final and binding on the Parties,
and specific performance may be ordered by any court of competent
jurisdiction. The Parties shall bear their own costs in preparing for the
arbitration. The costs of the arbitrators shall be equally divided between
the Parties.
16. Notices. Any notice, demand, request, waiver, or other communication under
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this Agreement shall be in writing and shall be deemed to have been duly
given on the date
of service if personally served or sent by confirmed telecopy and on the
third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered, return receipt requested, postage
prepaid and addressed to the following:
If to Compass: Compass Knowledge Holdings, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Xx. CEO
If to Xxxxx: Xxxxxxx Xxxxx
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
(000) 000-0000 Ext.366
IN WITNESS WHEREOF, the parties hereby execute this Agreement by their
respective officers duly authorized in their behalf effective as of the date and
year first written above.
Witnesses: Compass:
Compass Knowledge Holdings, Inc.
_______________________ By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx., CEO
Xxxxx:
________________________ /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
